Correlation Between Triad Pro and 4 Less

Can any of the company-specific risk be diversified away by investing in both Triad Pro and 4 Less at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Triad Pro and 4 Less into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Triad Pro Innovators and 4 Less Group, you can compare the effects of market volatilities on Triad Pro and 4 Less and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Triad Pro with a short position of 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Pro and 4 Less.

Diversification Opportunities for Triad Pro and 4 Less

0.62

Correlation Coefficient

Triad Pro  4 Less

Poor diversification

The 3 months correlation between Triad and FLES is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Triad Pro Innovators and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less Group and Triad Pro is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Triad Pro Innovators are associated (or correlated) with 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of Triad Pro i.e., Triad Pro and 4 Less go up and down completely randomly.

Pair Corralation between Triad Pro and 4 Less

Given the investment horizon of 90 days Triad Pro Innovators is expected to under-perform the 4 Less. But the pink sheet apears to be less risky and, when comparing its historical volatility, Triad Pro Innovators is 3.5 times less risky than 4 Less. The pink sheet trades about -0.12 of its potential returns per unit of risk. The 4 Less Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.04  in 4 Less Group on September 30, 2024 and sell it today you would lose (0.02) from holding 4 Less Group or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.97%
Values	Daily Returns

Triad Pro Innovators  vs.  4 Less Group

Triad Pro Innovators

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Triad Pro Innovators has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

4 Less Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 4 Less Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, 4 Less unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Triad Pro and 4 Less

The main advantage of trading using opposite Triad Pro and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Pro position performs unexpectedly, 4 Less can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 4 Less will offset losses from the drop in 4 Less' long position.

The idea behind Triad Pro Innovators and 4 Less Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.